5 questions before renewing your CD
Out with the old, in with the new?
While you may have locked in a high interest rate five years ago, McBride advises that CDs renew at current market rates. At the local branch level, high-value investors may be able to negotiate for slightly higher interest rates when renewing a CD.
Being aware of an upcoming renewal is crucial.
"If you're not paying attention and that CD renews for another three years at a low rate, you may leave yourself in a bad place," McBride says.
Taylor agrees and advises that depositors be aware of the renewal window in advance of the bank's notification. When the time arrives, he suggests comparing the renewal rate against what's available at other institutions.
To estimate your CD's earnings before you renew, use a bank CD calculator to determine your yield based on new rates and the frequency of interest compounding.